Zambeef Warns of 43% Earnings Plunge as Debt Costs Bite
Zambeef Products Plc, Zambia’s largest integrated agribusiness and food processing company, has announced a projected 43% decline in its Total Basic Earnings Per Share (EPS) for the half-year ended March 31, 2025, compared to the same period last year.
The trading statement was issued in accordance with the Listings Requirements of the Lusaka Securities Exchange (LuSE) and has been approved by LuSE, the Securities and Exchange Commission (SEC), and the company’s Board of Directors.
The company attributes the anticipated decline in EPS to a significant rise in financing costs, driven by elevated debt levels and increases in the Bank of Zambia’s monetary policy rate. Additionally, a higher income tax burden during the period further impacted the company’s bottom line.
These challenges overshadowed operational improvements, particularly in the cropping and beef segments, which had recorded strong year-on-year performance in the first and second quarters, respectively.
Despite the profitability squeeze, Zambeef continued to pursue its strategic priorities, which include revenue growth, cost efficiency, and volume expansion across its diverse portfolio. While inflationary pressures required price adjustments across most product categories, the company was unable to fully pass these costs onto consumers. This resulted in a margin squeeze that affected overall profitability in some divisions.
Looking ahead, the Group remains cautiously optimistic about the second half of the financial year. A forecast bumper harvest and improved summer crop yields are expected to boost the profitability of the Cropping division.
Furthermore, increased rural earnings from small-scale farmers will likely inject additional liquidity into the economy. Improved rainfall is also expected to enhance electricity supply, slightly easing production constraints.
However, Zambeef has warned that disease outbreaks continue to pose a material risk to its livestock operations. If not contained, these could have a substantial impact on the Group’s financial performance in the coming months. Despite these risks, the Group maintains its commitment to executing its long-term strategy and believes the fundamentals remain strong.
Zambeef plans to release its full half-year financial results by the end of June 2025. The company also reiterated that there has been no change to the guidance previously provided in its Trading Update on May 7, 2025. The current statement has not been reviewed or audited by the company’s external auditors.
Zambeef is one of the region’s largest producers and distributors of beef, poultry, pork, dairy, fish, flour, and stockfeed. With 250 retail outlets across Zambia, Nigeria, and Ghana, it also operates five beef abattoirs, three feedlots, a piggery, and extensive cropping land covering more than 16,000 hectares through both irrigated and rainfed operations.
